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IAA Journal of Applied Sciences 8(1):147-154, 2022. ISSN: 2636-7246
©IAAJOURNALS
The Impact of ICT on Economic Growth in Nigeria
Jibrilla Hamza Modibbo and Mary Opeyemi Fashola
General Studies Department, Federal Polytechnics Mubi. Adamawa State, Nigeria.

ABSTRACT
Economic drivers of most developed and developing nations are believed to be anchored
on their population growth, GDP per capita, inflation rate and most importantly ICT. This
study examines these drivers for the Nigerian economy using secondary data obtained
from World Bank and subjecting the data to Regression Analysis. Data gathered ranged
from 2008 to 2020 and Eviews is used for the analysis using Regression as the test tool.
The result reveals that increased inflation, population growth and GDP per capita have
negative effects on the number of Internet Users thereby affecting the economic growth
of the country. The study proffers recommendations that the Federal Government of
Nigeria can adopt to enhance ICT in Nigeria for its economic growth which include
enhanced funding and the development of an ICT master plan for the Nigerian State.
Keywords: Economic Growth, ICT, Population Growth, ICT Index and Inflation.

INTRODUCTION
Information Communication
Technologies (ICT) can be described as
an electronic means of capturing,
processing, storing and communicating
information [1,2]. ICT may be computer
hardware, software, and networks and
includes intermediate technologies like
radio and television, literate
technologies like books and newspapers
and organic technologies based on
human body like brain and sound waves
[3,4,5]. In addition, ICT could be referred
to as Information Technology (IT) that
lays emphasis on the function of the role
of unified communications and the
harmonization telecommunications,
which include computers telephone lines
and wireless signals, as well as necessary
applications software, storage, and
audio-visual systems, which enable users
to process information [6,7,8]. Studies
carried out, and still ongoing suggest
that innovation and technology are the
main indicators of improved economic
growth realization in developed
countries (Villa, 2005) and there is a
relationship between productivity
growth and technological progress
[9,10,11]. The significance of ICTs in
economic growth and development
resulted from the fast growth of these
technologies and their market in the
nineties. The world’s developed and
developing countries started immensely
to harness ICT for economic growth and
sustainable development [12, 13].
Recently, ICT is believed to foster
sustainable long-term growth as a
production technology through carefully
designed ICT systems (Alani, 2012). The
principal function of ICT is in enabling
humans, governments and organizations
to transform information into knowledge
as a strong driver in evolving lasting
change in the economy and society [14,
15, 16].
The role of ICT in economic growth has a
critical place in economic research;
although ICT has become an active area
for investment because of its dwindling
cost of services and equipment most
especially with the innovation of cloud
computing and the investment into ICT
which includes computers and their
peripherals, software, and
telecommunications devices [17, 18, 19].
Countries which comprise of the private
and public-sector investors have
invested in ICTs to improve their
performance and to gain other benefits
of ICTs thereby creating more jobs and
information space for their citizens. It is
pertinent to note that Worldwide ICT
spending is expected to exceed $5.6T in
[20,21] and the amount of money spent
on Information and Communication
Technology Research and Development
(R&D) in the United States is expected to
reach 126 billion U.S. dollars and that of
other countries (Germany, Russia, China,

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Modibbo and Fashola
India etc.) cumulatively is expected to
reach 228 billion US dollars [22]. The
amount expended in the sector, reflects
the fact that the ICT sector contributes to
an economy by creating job
opportunities where this sector leads to
create new job positions in the ICT
production sector or ICT providing
services. In Nigeria, for example ICT
sector has created thousands of jobs
directly and indirectly. The Director-
General of NITDA, Dr. Isa Ibrahim
categorically stated that Nigeria has been
spending $2.8Billion annually for the
importation of various ICT products and
services [22,23].
A survey carried out by the International
Telecommunication Union [23,24] states
that Nigeria has high population density
and the sector of wires and wireless
communication is considered as the
main sector that creates job positions
especially the mobile phone sector.
Furthermore, in September, 2018, a
survey carried out by the Nigerian
Communication Commission (NCC)
revealed that the contribution of the
Telecoms Industry to GDP was rated 7.7%
Objective of the Study
The major objective of the study is
evaluating the impact of ICT on the
Nigerian economy. This study examines
the role of ICT in enhancing growth in
Significance of the Study
World leading powers have shown yearly
increase on the amount of money spent
on ICT because these world powers have
realized the role ICT plays in stabilising
and promoting their economies and this
role reflected on the GDP in such
countries. Nigeria exited from recession
but Nigeria is still under abject poverty,
threat and the large population of its
youth not employed [7]. The increasing
Literature Review
[5] examined how the drivers of
economic growth can be categorized
under the following; Information and
communication technology (ICT),
population growth, gross capital
formation, openness and inflation in
developing countries and used Arab
countries as a case study. They examined
within the scope of 1995-2013 the effect
of the suggested factors on the economic
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in 2012 as against 10.43% in the second
quarter of 2018 [25,26]. This shows a
relatively contribution of the telecoms
industry to GDP resulting to economic
growth. Furthermore, the Executive Vice
Chairman of NCC, Prof Umar Dambatta of
Nigeria revealed that the ICT sector
contributed N500 billion to the Nigerian
economy in 2014 and created about 2.5
million jobs in 10 years and attracted $30
billion foreign investment between 2003
to 2014 [27]. The revolution of ICT in
developing countries is expanding and
spreading giving the hope for these
countries to achieve technological
advances that contribute in advancing
and developing their economies [21].
Nigeria not being an exception has
benefitted from ICT in the areas of
banking, fight against terrorism, e-
governance and human resource
development. Nigeria being a developing
country is in need of radical change in
governance and this can only be achieved
by reengineering existing governance
processes with the help of ICT. The uses
of ICT can lead the nation to overall
economic growth/development.
Nigeria by evaluating the number of
internet users in the country as a factor
of population, GDP per capita and the
inflation rate.
number of internet users should provide
an avenue for Nigeria to adopt/provide
ICT services that enhance
communication with other countries.
This study will present the effect of ICT
on economic growth of the Nigerian
economy considering that Nigeria is a
developing country despite its various
challenges.
growth of Arab 18 (eighteen) nations with
the effect was tested using Econometric
analysis. The research revealed an
outcome which suggested that ICT and
other suggested factors affect the 18
Arab nations’ economic growth.
Although, inflation had a negative effect
on economic growth for 18 Arab nations.
[8], reviewed the growth benefits that the
ICT sector has provided and its impact on
Modibbo and Fashola
the Nigerian economy and postulated
that the growth rate as an apparatus to
the progression of economies of
emerging countries like Nigeria in the
21st century. ICT and ICT related
facilities aid in the development of
markets, decrease in transaction costs
and increased productivity and
management in both public and private
sectors of the Nigeria economy. They
postulated the numerous impacts of ICT
in the four major sectors of the Nigerian
economy, suggesting the prospects of
the wireless technology platform in
fostering economic and social impact for
the populace.
[12], reviewed long run effect of ICT on
economic growth in the Sub-Saharan
African (SSA) region. The analysis of the
impact of ICTs use was assessed for a 27-
year period (1990-2014), before the
Millennium Development Goals (MDGs)
era (1990-1999) and during the MDGs era
(2000- 2014). The nonlinear effect of ICT
in the economic growth and their
threshold values were also examined.
The research showed that mobile phone
and internet were found to have
triggered economic growth. The results
indicated that, except for financial
development, human capital,
institutional quality and domestic
investment were the main growth
enhancing transmission channels of ICTs
use in the economy. [8], postulated that
Information and Communication
Technology (ICT) is a tool that is capable
of enforcing sustainable economic and
social development in the society. They
further stated that the resultant effect of
ICT adoption can be seen in various
sector in Nigeria. Such sectors include, e-
banking, telemedicine, e-learning, tele-
commuting, the use of ICT enhances the
possibilities of developing countries to
improve the standard of living thus
promoting media networks, security,
medical practitioners, governance,
safety, agriculture producers, research
institutions, financial organizations, and
small business enterprises. They
suggested possible ways to achieve ICT
growth in Nigeria which include Human
Resource Development, infrastructure
development, Research and
Development and Electronic
Government.
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[15], postulated that the Information and
Communication Technologies (ICTs) play
a major role in economic growth and
economic development of India. He
examined and analyzed how ICT has
driven economic growth of India. More
so, secondary data was to draw
conclusion on data sourced collected
from numerous statistical report and
government websites. Findings showed
an assessment of sectors of the IT
industry and its effect on the economy.
[14], reviewed the notion of Information
and Communication Technology (ICT)
and its effects on the Nigerian economy.
They further postulated with focus on
the pros and cons of ICT in economic
advancement as well as
recommendations geared towards
harnessing ICT for the overall
development of the socioeconomic and
political status of Nigeria. Their study
revealed that for Nigeria to be socially,
politically and economically competitive,
Nigeria has to adopt ICT in areas of
politics, health, business, education,
poverty reduction and national security.
They further postulated that Nigeria
direct its focus on positive development,
implementation and access of ICT to its
populace.
[5], investigated the major roles that ICT
can contribute in enhancing the
economies of rural areas in emerging
countries, with its main focus on rural
areas. They further postulated that in the
last ten years, because of the quick
spread of mobile phones, ICT has had a
great impact on the economic
development by enhancing the business
activities of rural areas. ICT has provided
access to information for the market men
and women with financial services at the
doorsteps of rural consumers and helped
in the exchange of business know-how
and thereby linking themselves. They
also proffered practicable solutions in
the disparity between the drivers of
technology and the inherent
beneficiaries in rural areas of developing
countries and also the opportunities
generated as a result of convergence of
ICTs. Their study revealed that the
provision of a less expansion and
efficient tools for providing cheap and
efficient tools for access to information
and exchange of ideas and knowledge
will serve as an enhancement tool for
Modibbo and Fashola
greater socioeconomic improvement and
ICT could assist in knowledge sharing
and information exchange.
Challenges of ICT in Nigeria
ICT which is the economic driver for
most developed economy has been
identified as the key player in
economic/sustainable growth. The
following are the challenges of ICT in
Nigeria.
a) . Inadequate ICT policy enforcing
the use/adoption of ICT driven
services- there are no adequate
rules in place to ensure the safe
use/adoption of ICT services in
the Nigerian State, while sectors
like the banking sector fully adopt
ICT in the execution of its
services, other sectors are yet to
fully adopt the use of ICT services
in its service e.g. education and
tourism sectors.
b) High Cost of ICTs Equipment in
Nigeria- the exorbitant cost of ICT
equipment in Nigeria is a major
challenge of ICT growth in
Nigeria. The Federal Government
of Nigeria (FGN) should has not
adequately protected the ICT
sector through price control and
the ensuring the standardization
of important ICT goods/services.
c) Inadequate funding of the ICT
sector- According to [8], the
amount of money been spent on
ICT (Research and Development)
in Nigeria is on the low side,
therefore for the pursuance of
economic growth through ICT, the
FGN needs to urgently increase
METHODOLOGY
The study adopts Eviews to analyse the
indicators (sourced from World Bank) of
the Nigerian economy which include
GDP, GDP per capital, inflation rate,
internet users, population, and
thereafter draw recommendation from
the findings of the study. The indicators
of the Nigerian economy from the year
2008 to the year 2020 will enable this
Regression
The study adopts regression for
estimating the relationship between data
source from the World Bank, more so
regression analysis is a group of
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the amount spent on ICT to foster
economic growth.
d) Low ICT Literacy Level and Lack of
trained ICT Personnel- The low
ICT literacy level of personnel in
the country has slowed down
economic growth, FGN needs to
introduce the practical use of ICT
services in Nigeria by establishing
ICT internet driven centers with
trained Personnel in every state of
the Federation and the practical
use of ICT in primary to tertiary
institutions. This will encourage
persons who cannot afford
internet services the opportunity
to enhance his/her skills in such
area.
e) User Acceptance- since people
have not been enlightened on the
need to drive ICT with services,
they find it difficult to accept ICT
because of the fear of losing their
jobs, so they frustrate whatever
services that ICT can drive. f.
Inadequate synergy between
Nigeria and other ICT driven
developed Nations on the
transfer/adoption of ICT
knowledge to Nigeria- there is no
cooperation between Nigeria and
other ICT developed economies,
this has led to poor transfer of ICT
knowledge, without this transfer
of ideas, and Nigeria cannot
enhance her ICT
skills/knowledge.
study to ascertain the role ICT has played
in the enhancement of economic growth
in Nigeria. The study has ascertain
whether or not the progression or
retrogression of ICT will enhance
economic growth. This has been
achieved by running a Regression
analysis on the economic indicators
below.
statistical procedures used for
estimating the relationships among
variables used for predictions and
forecasting. The table below present’s
Modibbo and Fashola
data sourced on the indicators of the
Nigerian economy.
The study hypothesized that ICT has a
significant impact on the gross domestic
product of Nigeria. The model proxies
Gross Domestic Product (GDP) as the
endogenous variable to measure the
trend of Nigeria’s economic growth while
ICT users (ICTU), Population growth
(PPG), and Inflation rate (INF) represent
the exogenous variables. This study
adopts a modified Ouedraogo (2015)
model that was developed by Brambor,
Clark, and Golder (2006) as specified:
GDPit = α1 ICTUit + α2 PPGit + α3 INFit + εit
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The above model depict GDP per capita,
Inflation rate (%), population and internet
users between 2008 and 2020. There is a
clear indication that the number of
internet Users have increased, which
implies that ICT services can be deployed
to drive activities in the country,
although it should be noted that as of
2017, the number of internet users does
not reflect up-to 20% of the country’s
population. There was a sharp increase
on the inflation rate from the year 2015,
which implies increased cost of goods
and services. In 2017, the GDP per capita
increased significantly which, implies a
growth on the economy.

Table 2

ARDL(1,0,1,0) Equilibrating Short Run Dynamics

Relationship
(1) (2) (3)
Dependent Variable: 𝑙𝑛𝐺𝐷𝑃
Constant 0.534 4.195∗
(1.205) (9.279
𝑙𝑛𝐺𝐷𝑃𝑡−1 0.873∗∗∗
(0.048)
𝑙𝑛𝐼𝐶𝑇𝑈 0.050∗∗ 0.395∗
(0.022) (0.224)
𝑙𝑛𝑃𝑃𝐺 0.029 0.553∗∗
(0.023) (0.196)
𝑙𝑛𝑃𝑃𝐺𝑡−1 0.041∗
(0.021)
𝑙𝑛𝐼𝑁𝐹 0.033∗∗ 0.260∗∗
(0.016) (0.118)
𝐸𝐶𝑀𝑡−1 −0.127∗∗∗
(0.020)
Adjusted 𝑅2 0.99 0.367
Observations 32 33 33
F-Bounds Test: F-Statistic 6.823
Critical Value (3.670)
Significance level [0.05]
Serial Correlation Test 0.616
[0.735]
Heteroskedasticity Test 4.056
[0.541]
Note: *, ** & *** represent 10%, 5% & 1% significant levels.

The Summary table above depicts the
values of the R, R2, adjusted R2 and the
standard error of the estimate, the above
values can be used to determine how well
a regression model fits the data. More so,
the "R" column signifies multiple
correlation coefficient. The value of R
can be reflected as one measure of the
quality of the prediction of the
dependent variable (Population), in this
case a value of 0.99, which implies a
good level of prediction. The "R Square"
column depicts the R2 value (coefficient
of determination), which is the

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Modibbo and Fashola www.iaajournals.org
proportion of variance in the dependent our value of 0.873 that our independent
variable that can be explained by the variables explain 87.3% of the variability
independent variables. One can see from of our dependent variable, Population.
Estimated Model Coefficients
The general form of the equation to extracted from the Coefficients table, as
predict Internet-Users from Population, shown above. Also, the "Sig." column
Inflation, and GDP per capita is: shows that all independent variable
predicted Internet-Users = coefficients are statistically significantly
511870187.600 - (2053674.917 x different from 0 (zero) excluding
Inflation) - (7213427.284 x GDP) this is Population.
Findings
Findings from the regression showed decrease in “Internet users” by 2.510
that unstandardized coefficients signify Nigeria is ranked 157 in the Human
how much the dependent variable varies Development Index rating in the world,
with an independent variable when all findings showed that with a population
other independent variables are held of 190 million, only an estimated 25.67
constant. For the effect of inflation, the million people do have access to the
unstandardized coefficient, B1, for worldwide network [9]. Nigeria still has a
Inflation is equal to -2053674.917. This lot to do to stand out in the rankings by
means that for each one-year increase in the United Nations to promote her
inflation, there is a decrease in “Internet Human Development Index (HDI), ICT
users” by 2053674.917. For the effect of which has helped countries like China,
GDP, the unstandardized coefficient, B1, USA and India can also be replicated in
for Inflation is equal to -7213427.284. Nigeria to promote her economic growth
This means that for each one-year thereby increasing its world ranking on
increase in GDP, there is a decrease in HDI. Also, the number of internet user’s
“Internet users” by 7213427.284. For the increase with increasing population and
effect of Population, the unstandardized decreasing cost of ICT infrastructure,
coefficient, B1, for population is equal to which implies that in the years to come
-2.510. This means that for each one-year ICT will provide sufficient jobs and
increase in population, there is a services to drive the Nigerian economy.
CONCLUSION
Information and communication world bank to predict the effect of
technology (ICT) activities are necessary Population, Inflation and GDP per capita
elements of any development activity in on the number of internet users in
this present age. The study reviewed the Nigeria. It was gathered that increasing
role of ICT has played in Economic inflation affects the number internet
Growth and used SPSS as a statistical tool users and a reduction in GDP per capita
and Regression as an analytical tool for also affects the number internet users.
the secondary data sourced from the
Recommendation
ICT in Nigeria has had a slow growth, as products and services which can be
a result this study proffers the following exported to other countries. 4. Develop
recommendations in order meet other an ICT master plan for Nigeria 5. Training
ICT driven developed economies. 1. The and retraining of Staff of the ICT
FGN should allocate more funds for the Regulation Agencies 6. Encourage youth
realization of an ICT driven Nigeria. 2. to go into ICT by creating an enabling
The provision of cheaper Internet facility environment. 7. Research on ICT driven
can be achieved with the collaboration economy with the collaboration of the
with the private sector Academics. 8. The application of ICT
(Telecommunication Companies) 3. services in all sectors of the country thus
Development of a knowledge base with promoting transparency and
developed ICT driven economies, thus accountability 9. Awareness/Provision of
the promotion of indigenous ICT ICT services in rural areas.
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